Why we buy: The retail consumer’s mindset in crisis mode
Work, mid-week drinks, birthdays, weddings, nights out – almost every part of our former lives used to prompt us to treat ourselves to something new; whether it was a new dress, a shiny accessory or just a fresh blowout. And let’s be honest: more often than not, we obliged.
But, the arrival of COVID-19 and the imposed lockdown measures earlier this year, drastically changed our social lives and all their related rituals. So how has our need state changed since then? And why do we now need anything new at all?
You lose some, you buy some
The pandemic caused the biggest economic slump on record in Australia. Despite the retail industry experiencing its biggest dive (-17.7%) in April, retailers quickly adjusted to this ‘new normal’ and consumers hurried back shortly thereafter.
By the end of May, retail numbers were in the black again (+16.9%), blowing out any year-on-year comparisons. And, according to the ABS (Australian Bureau of Statistics), the trend continued into the following months despite Victoria’s regression into a second, much harder, lockdown. In fact, Aussies spent 3.2% more in July than in June, recording a third consecutive month of turnover growth for the sector. Even more striking: it’s a 12% increase in sales compared to the same time last year.
So, if it suddenly seems like people are buying more, it’s because they are.
Course Corrector, a research initiative aggregating first-party survey data, search behaviour and social sentiment data, confirms that a quarter (24%) of Aussies feel they’ve increased their retail spend compared to previous months, with female shoppers (27%) ahead of their male counterparts (20%) in the check-out queue.
My retail shopping spend has
When the going gets tough, the tough go shopping
But what are we spending our money on, considering we’ve got nowhere to go? Fortunately, we’re past the stage of frantically emptying supermarket shelves of dried noodles and loo paper. Though essentials are, of course, still at the top of everyone’s shopping list. Moreover, shoppers are splurging on low-cost non-essential items (50%) and even some high-end buys (21%).
In the past month, most of my purchases are
More precisely, it seems as if we’re replacing what used to be our normal activities, like dining out, with the likes of Uber Eats (49%), aiming to fill the gaping hole of events with digital entertainment (48%), the lack of occasions by stocking our closets (38%) and the void of social interactions with self-care products (26%).
In the past month, I’ve purchased
Buying our feelings
Interestingly, the dominant demographic behind these purchases seems to be the one that will be most impacted by the economic downturn in the long term: Millennials and Gen Zs aged 18-34. Not only do they account for two-thirds (72%) of takeaway orders, but they’re also piling up apparel purchase (52%) and beauty products (40%).
In the past month, I’ve purchased (18-34 years)
According to Shopify’s 2020 product trends, ‘feel-good’ items, such as beauty face masks, exercise equipment (specifically exercise bands and yoga/Pilates mats), jigsaw puzzles and board games, seem to be of particular interest.
This could suggest shoppers are pining for ways to reduce their everyday screen time and alleviate stress, and thus confirming retail therapy is a real thing.
Shopping as a result of negative stressors can indeed boost our oxytocin levels and overwrite feelings of sadness (albeit temporarily).
Aussies shoppers in explorer mode
In addition to a rejuvenated will to shop, it seems the pandemic has also left consumers with a new-found curiosity to expand their buying horizons.
Course Corrector revealed that almost half of 18-34-year-olds have recently discovered new brands or products via social media (45%), word-of-mouth (44%) and ecommerce websites (42%). For business owners, this highlights the huge opportunity of having an online presence.
Given the continuously fluctuating state of the COVID-19 consumer’s confidence and financial divide of the haves and the have-nots, brands need to do more than just aim to hit their sale targets. Those set to survive and thrive in this new retail era are the ones creating positive emotional value that people are likely to remember far beyond their initial purchase.